If you are over 18 it’s time to have a conversation about estate planning. The earlier you start the easier it is to maintain and account for major life changes such as marriage, children, owning property and building wealth. Having a plan in place ensures your legacy will live on the way you want it to.
Estate plans consist of several types of documents:
- Wills (also referred to as Last Will and Testament)
- Trusts
- Testamentary Trusts (a trust formed within a Will, created at the time of death)
- Inter Vivos Trusts
- Revocable Trusts
- Irrevocable Trusts, and
- Special Purpose Trusts such as Marital Trusts, Family Trusts, Special Needs Trusts, etc.
- HIPAA Release Forms
- (Financial) Powers of Attorney
- Durable
- Springing
- Health Care Proxy
- Homestead Declaration
Estate planning also considers:
- Taxes such as the Estate or Death Tax, Gift Tax, and Generation Skipping Tax for both federal and state purposes, including use of any exemptions allowed
- Investment and retirement accounts
- Life and other insurance policies
- Trusts naming you as a beneficiary
- Partnerships, LLCs, Corporations, businesses, etc. in which any interest is held by you
- Real Estate owned by you and the type of ownership title
- Bank accounts individually and jointly held
This is a lot of material and information to consider as part of a plan, which is why it helps to hire a professional to guide you through it.
Think about creating your estate plan in terms of telling your life story, where you came from, your family and what they mean to you, relationships both good and bad over the years, your career plans, your concerns for your family, community and the world at large, and what you would like to do with your wealth and possessions after you pass away. A well designed plan can support family and loved ones for years on end without worrying about making ends meet after you are gone.
An estate plan is also one of the best gifts you can leave to your family and loved ones as it allows for a smooth transition at time when financial stability is the last thing on everyone’s mind. A well designed plan should also keep most if not all of your estate from going through the probate process.